- Prior was 196K (revised to 198K)
- Continuing claims 1719K vs 1745K expected
- Prior was 1730K (revised to 1717K)
US initial jobless claims came in at 197K, below the 201K expected by economists, pointing to continued resilience in the US labor market. The previous week’s reading was revised higher to 198K from 196K, nevertheless, claims remain at historically low levels, indicating that layoffs remain contained.
The picture was even stronger in continuing claims, which fell to 1.719 million, well below the 1.745 million expected. The previous reading was revised to 1.717 million from 1.730 million. Taken together, the data suggest that the US labor market remains healthy and the Fed can continue to focus solely on inflation.
For background, initial claims provide a high-frequency indication of how many people are newly applying for unemployment benefits. A low level of claims generally indicates that companies are not carrying out large-scale layoffs. The decline in continuing claims is also notable because it suggests that people who have already lost their jobs are finding new employment relatively quickly.
The reaction in the markets has been fairly muted as the strength in jobless claims doesn’t change the current outlook. The markets already know that the US labour market is stable, so only a deterioration would change those expectations.
The US PMIs have also highlighted the resilience in the labour market yesterday. In fact, S&P Global said employment rose sharply in September, with job creation reaching its fastest pace in more than four years, since June 2022. The increase was broad-based across both manufacturing and services, as companies hired more workers to deal with stronger demand and rising backlogs.
This article was written by Giuseppe Dellamotta at investinglive.com.